NICA urges FG to pump N2 trillion into credit guarantee company

The National Institute of Credit Administration (NICA) has asked the Federal Government to immediately capitalise the National Credit Guarantee Company (NCGC) with N2 trillion to expand access to credit for businesses and productive sectors.

NICA Registrar and Chief Executive Officer, Prof. Chris Onalo, made the call in a statement on Sunday on the state of Nigeria’s credit economy.

Why the FG needs to act

Onalo said the recent recapitalisation of Nigerian banks would not automatically translate into economic growth unless deliberate measures were introduced to channel more credit into productive sectors.

He noted that private sector credit stood at 28% of Gross Domestic Product as of June 2026, significantly below the 60% to 80% average recorded in emerging economies.

According to Onalo, lending rates of between 32% and 35% have made formal credit inaccessible to key sectors, including manufacturing, agriculture, housing and education.

He said banks had become increasingly risk-averse despite improved liquidity following the recapitalisation exercise. He attributed this to weaknesses in Nigeria’s credit infrastructure, limited credit bureau coverage, weak collateral enforcement and slow judicial recovery processes.

Onalo warned that the widening credit gap was pushing millions of Nigerians towards informal lenders and digital loan platforms, a development that could worsen household debt and weaken the capital base of small businesses.

He described the situation as a “credit paradox”, where funds were available within the banking system but were not circulating sufficiently within the productive economy.

“Given the recent robust bank recapitalisation, the Federal Government should immediately capitalise the Nigerian Credit Guarantee Company (NCGC) with N2 Trillion.

“This broad-based guarantee will de-risk lending, unlock bank balance sheets, and upscale credit to MSMEs nationwide. It is the bridge between strong banks and a strong economy,” he said.

Other proposals from NICA

Beyond the NCGC, Onalo called for single-digit intervention funds for agriculture, manufacturing, housing and the creative economy through relevant government institutions.

He also proposed the establishment of an Office of the National Chief Credit Officer to coordinate federal credit policies, intervention funds and guarantee programmes.

Onalo recommended mandatory credit reporting by fintech companies, cooperatives and other lenders to strengthen Nigeria’s credit infrastructure and improve borrower visibility.

He also called for the full digitisation of the National Collateral Registry to reduce lending risks and make it easier for businesses to access financing.

The NICA boss urged the government to strengthen regulation of digital lenders to protect borrowers from predatory interest rates and unethical debt recovery practices.

He further proposed reforms that would allow pension and insurance funds to invest more in corporate bonds and infrastructure debt, potentially creating additional long-term financing for businesses and infrastructure projects.

He also asked all 36 states to establish Credit Access Departments to work with financial institutions and the NCGC in providing funding for grassroots enterprises.

NCGC background and recent moves

President Bola established the National Credit Guarantee Company Limited in May last year with N100 billion initial capital and approved the appointment of its board and management team.

Tinubu appointed former Speaker of the House of Representatives, Rt. Hon. Yakubu Dogara, as Chairman of the NCGC Board, while Mr. Bonaventure Okhaimo serves as Managing Director and Chief Executive Officer.

According to the Presidency, the institution was designed to de-risk lending and expand access to finance for Micro, Small and Medium Enterprises (MSMEs), small corporates, manufacturers, consumers, and large businesses across Nigeria.

The company is expected to strengthen confidence in the financial system, support underbanked groups such as women and youth, promote industrialisation and generate employment.

The NCGC recently signed an agreement with the Nigerian Consumer Credit Corporation (CREDICORP) to establish a risk-sharing partnership aimed at expanding access to consumer credit.

Under the partnership, the NCGC will provide partial credit guarantee coverage for lending and advances made through CREDICORP’s Participating Financial Institutions.

The move signals a push to unlock cheaper and safer credit for Nigerians. If the proposed N2 trillion injection comes through, it could lower borrowing costs, ease pressure on small businesses and support broader economic activity.